Cabbies May Keep Rivals Off London Bus Lanes After EU Ruling

Private car-hire services suffered a legal setback today as the European Union’s top court backed the exclusive right of London’s iconic black cabs to share some traffic lanes with buses.

Judges at the EU Court of Justice in Luxembourg said rules favoring the black cabs are legal because of differences between the services, including black cabs’ ability to pick up passengers that hail them without a booking. The ruling will be a blow to the Addison Lee Ltd. unit that brought the challenge and other black-cab rivals, such as Uber Technologies Inc.

Private car-hire services face a range of hurdles around the globe as they seek to compete with traditional taxis. China’s Ministry of Transport earlier this month banned private cars from offering unlicensed taxi services via mobile-phone apps, even as it endorsed the software as having a “positive role” for licensed vehicles and chauffeurs.

“Today’s decision is yet another bad news story for private-hire vehicles this week, with Uber being banned in Beijing and now the ECJ endorsing the status quo in London,” Simon Neill, a lawyer atOsborne Clarke, said in a statement.

A unit of Addison Lee, which operates more than 4,800 cars in central London, filed the lawsuit in today’s case seeking the right of its drivers to also get access to the fast-track routes, which only buses and licensed black cabs can use.

Illegal Aid

A London court sought the EU tribunal’s view on whether excluding private hire companies from using the lanes is illegal state aid. The Addison Lee unit sued in London after some of their drivers were fined for using bus lanes, arguing the prohibition violated the freedom to provide services and was illegal state aid to black cabs.

The EU ruling will be reviewed by London judges before the U.K. court issues a final decision in the case.

Since black cabs are in a factual and legal situation which is distinct from that of private-hire vehicles, exclusive access to bus lanes “does not appear to be such as to confer, through state resources, a selective economic advantage,” the EU Court of Justice said in statement after today’s ruling.